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CHICAGO, June 23 (Reuters) - Goodyear Tire & Rubber Co. , one of the world's largest tire makers, said on Monday it shipped more consumer replacement tires in North America during May although the unit's operating income declined for a second straight month due to higher costs.
The Akron, Ohio-based company said unfavorable raw material costs, price/mix changes and conversion costs at North American tire, its largest unit, were only partially offset by lower personnel and development costs.
Goodyear stock dropped as much as 9.4 percent as a result.
The company needs to turn around its North American tire operations in order to regain its financial footing.
It has refinanced its bank loans, eliminated its dividend, put its chemicals unit on the block and stopped matching employee retirement plan contributions recently in order to save money.
Goodyear also has asked its union, the United Steelworkers of America, for substantial concessions. The USWA, which made a contract offer during the weekend, has set Friday as the deadline for a tentative agreement.
In May, Goodyear said industrywide shipments of consumer tires in North America fell 4 percent.
The company's North American shipments to car and truck makers declined more than the industry, which dropped 8 percent. The fall is consistent with Goodyear's decision to eliminate unprofitable or low-margin businesses.
In addition, the company gained share in the North American markets for commercial tires. Industrywide shipments of commercial replacement tires gained 8 percent while shipments to car and truck makers declined 5 percent.
Goodyear shares declined 52 cents, or 7.8 percent, to $6.12 a share in New York Stock Exchange trading. It has traded as high as $19.30 in the past 52 weeks.